JayQuest for Finance

Making The Most Out Of Forex News

The most important component in any fundamental analysis of dynamic price movement is understanding the factors on which market participants are basing their evaluations. If you want to know the future direction of currency movements, then you must actively seek out forex news.

Fundamental vs Technical Analysis

Causation of price movement is often described as originating either based on factors related to the underlying instrument (fundamental analysis) or to factors related to the price itself (technical analysis). In either case, you must pay attention to forex news, whether it consists of underlying factors or price data. Even if your focus and orientation are technical, knowledge of the data surrounding the price (volume, volatility, trending metrics, and more) are necessary to give you a competitive trading edge.
And for most successful market participants, who use a combination of all available information with their own unique insight, access to the latest breaking information is the basis of their endeavors.

The Importance of Forex News
The simple truth is, forex news drives the market. Financial and political events directly impact the market, no matter where these events occur. A political revolution or an earthquake will have a huge impact on a specific country and on its currency.

Therefore, all currency pairs related to this country will also be affected. And this kind of forex news is exactly what an experienced and smart forex trader will make use of. Once you get the right information at the right time, you can adjust your trades and turn a profit.

Online forex market-makers and brokers offer a variety of channels to help you track forex news and perform fundamental analysis. As part of your evaluation process of potential forex platforms and brokers, include an assessment of their market information supply. This data usually requires no commitment on your part, enabling you to potentially continue to enjoy a summary/broadcast source without requiring usage of their services. Similarly, reputable industry communication outlets, like the Wall Street Journal and Financial Times, despite their selective firewall practices, enable and encourage readers to subscribe to email newsletters wherein breaking news is regularly conveyed.

Avoid This Mistake
While ignorance is bliss, trading with less knowledge than other market participants is blatantly self-destructive. And while exposure to the cacophony and multitude of opinions and facts can result in more stressful decision-making, a winning formula requires no less. Find out why it is important to always be aware of forex news and how it can help you successfully trade online.

Interesting Examples
The single greatest factor in currency evaluation is relative interest rates. The value of a currency to external investors is largely composed of the returns available by holding securities denominated in that currency. Additionally, macroeconomic and political news affect currency evaluation by the additional insights on what is the currency economy's true underlying worth. Among the forex news events that warrant your regular attention are:

Following housing markets news to get insight into a country's most important physical asset
Following news related to central banks and international organizations is important to get an overall global picture.
Understanding where an economy is within its expansion cycle helps you to understand future interest rate changes and from that, currency value.

Finally, periodic events like elections and one-off occurrences like weather-related disasters are all part of the information set that comprises forex news.

Get Started Trading with Forex Basics

An Introduction

What is forex trading? With daily turnover in excess of $5 trillion, foreign exchange, or forex (also known as FX), is the biggest trading market in the world.

Unlike traditional exchanges where stocks, products, and goods are traded, forex is a market where people and companies from all over the world try to earn by trading national currencies

Put simply, it is the process of making a profit by exchanging one currency for another. The profit is in the difference of various currencies' values, and everything is based on the tried-and-true golden rule of trading: buy low, sell high. Because of this many people across the globe are asking the simple question: what is forex?

Forex trading is all about speculation and predicting financial markets gyrations.

Although the basic principle is simple--buying and selling different currencies--the reality is more complicated. The value of money is an extremely changeable asset.

In fact, it is--as some economists like to say--the most unpredictable merchandise. Its value depends on almost everything that is connected with both global and state politics and their attendant economic situations.

Forex is a market giant that is not limited to a physical location or state borders. Forex trading is also not limited to daily working hours. It is always busy in the currency exchange market because the situation is changing every moment. There is no downtime if you want to be successful in forex trading.

Our Answer To "What Is Forex" Question

The first thing you need to know when asking yourself “what is forex?", and considering whether you want to learn about forex trading is to realize that it is a highly competitive business, and that as with all trading, there are no guarantees you will be successful.

You must put a significant amount of time and effort into learning and you must have a can-do disciplined mind-set.

You must possess the ability to both learn from and emotionally detach yourself from your inevitable losing trades. The potential for both profit and loss are higher than in traditional types of trading.

The forex market is virtually 24/5, starting on Monday morning in New Zealand's capital (Wellington), and ending in New York on Friday.

Because the underlying asset is so abstract and fungible, the required trading margin (deposit) is minimal — as little as 1%, or even less, depending on the instrument and the nature of the transaction; open-ended or time dependent (like options that expire).

Every pair consists of the so-called "base currency" and the "counter" currency. In a nutshell, you have to predict the optimal time when buying or selling.

For example, if your currency pair is EUR/USD, then the base currency is the Euro, while the counter is the US Dollar. The perfect time for buying this pair is when the Euro is about to strengthen against dollar. On the other hand, you should sell your pair if you think that the dollar will appreciate relative to the euro.

In Summary
So overall, what is forex? As previously stated, trading forex looks easier than it really is. There are a myriad of factors that affect the values of currencies. With so many variables changing all the time, an investor has to stay very focused and pay attention to even the smallest details.

It is not an easy job, and it is not even the most profitable job. But with the proper strategy, knowledge, experience, and the right forex broker, you may earn a sufficient profit on forex trading.

Different Types Of Forex Charts

Forex trading requires sufficient practice and learning. A basic skill needed for this type of trading is understanding the forex charts (technical analysis).
Most forex traders rely on real-time charts to keep themselves informed of the ongoing market situation and trade according to how the market moves.
It's a practice that makes online trading a whole lot easier.
However, comprehension and interpretation of forex charts requires skills and experience.

Significance of Forex Charts
Visual chart patterns enable the trader to remain focused on price movement without evaluating the reasons responsible for movement of the price (fundamental analysis).

The quick emergence of patterns in price movements enables the trader to watch not just the news, but also the reaction of other traders to news that is released.

Trends are measureable and cyclical. A forex trader who understands the imputed information in price movements can evaluate trends from the previous periods (weeks, months, or years) and trade accordingly.

Line Chart
Line charts are perhaps the simplest of forex charts, focusing on the closing prices of any given currency. (Note that forex values are always quoted in pairs, such as GBP/USD or USD/JPY. In every forex exchange transaction, you are simultaneously buying one (base) currency and selling another (quote currency)). You just need to draw a straight line from one closing price to another to understand the movement in price of a given currency over a defined period of time.

Bar Chart
Though slightly more difficult to read and comprehend than the line chart, a bar chart displays a more precise representation of price movements. Apart from the closing and opening prices, it also shows the low and high price of the currency pair you may be trading in.
It is comprised of vertical lines, each line showing the price variation (lowest and highest prices) over a unit of time, from ticks (individual trades) to weeks, or more. The corresponding forex charts have tick marks, projecting out from each end of the line to indicate the opening price. For example, if it were a daily bar chart, it would indicate the opening price for that day on the left while the closing price for that time period would be shown on the right. The bars are usually shown in different colors to show if prices went up or down in that period.

Candlestick Chart
Candlestick price charts were developed by Japanese rice traders over 150 years ago. This kind of chart is as accurate as the bar chart but displays information in a more helpful manner. Many traders appreciate its convenient patterns that facilitate estimation of trends and likely changes in prices. This chart combines a line chart and a bar chart, with each bar representing all the four significant pieces of information for any chosen day: the open, the close, the high, and the low.

The hollow or filled portion of the candlestick is called "the body" (also referred to as "the real body"). The long thin lines above and below the body represent the high/low range and are called "shadows" (also referred to as "wicks" and "tails"). The high is marked by the top of the upper shadow and the low by the bottom of the lower shadow. If the stock closes higher than its opening price, a hollow candlestick is drawn with the bottom of the body representing the opening price and the top of the body representing the closing price. If the stock closes lower than its opening price, a filled candlestick is drawn with the top of the body representing the opening price and the bottom of the body representing the closing price.

Sample Sample forex charts are available on the internet for uploading for your personal training. Use these sample data sets to gain familiarity with real-life scenarios. Only after thorough preparation should you begin to use forex charts as a key analytic tool in your trading arsenal.

Foreign investors expected to boost domestic financial markets

Global asset managers and sovereign funds are likely to strategically scale up investments in Chinese financial markets after the country's first-half economic data boosted their confidence in China's high-quality development agenda, experts said.

China reported 5.3 percent GDP growth on a two-year average basis in the first half of the year, up from the first quarter's 5 percent, the National Bureau of Statistics said on Thursday.

The acceleration occurred even as Beijing, ahead of many other governments, has taken measures to wean the economy from stimulus to prevent risks, pointing to robust momentum of recovery.

Seeing that China's second-quarter economic growth remained strong, Standard Chartered Bank revised its GDP growth forecast for China in 2021 to 8.8 percent year-on-year, up from 8 percent, according to China News Service.

Experts said such economic resilience and policy resolve toward greater development quality have brightened global investors' confidence in the long-term prospects of the nation's economy.

"China's response to the COVID-19 has positively impacted sovereign funds' view of the country," said Terry Pan, CEO for Greater China, Southeast Asia and South Korea at Invesco, a global asset manager.

According to Pan, a recent Invesco study found that 40 percent of surveyed sovereign funds planned to increase allocation to China over the next five years, drawn by attractive returns and diversification benefits.

Unlike many developed economies like the United States that have launched historic stimulus packages, including direct benefits to households amid the COVID-19 pandemic, China has focused on prudently safeguarding the survival of businesses and has tapered its policy support this year, with a contraction year-on-year in new social financing.

Chen D**g, a senior Asia economist at Pictet Wealth Management, a Swiss firm, said China's prudent approach is likely to be healthier in the long term, as the nation has refrained from piling up debt that could worsen financial conditions.

He added that the Chinese economy is expected to grow 4.6 percent annually on average from 2027 to 2030－still fast given the country's huge economy.

Christophe Donay, Pictet Wealth Management's head of asset allocation and macro research, said such attractive economic growth and growing innovation power have elevated the return prospects of Chinese bonds and stocks, making it sensible for investors to include Chinese asset classes in their portfolios for higher investment returns in the next decade.

Over the past year, global holdings of Chinese stocks and bonds have surged about 40 percent to more than $800 billion, Financial Times reported last week.

BlackRock, the world's largest asset manager, said in a report that China is pursuing a more orthodox policy compared with developed economies and is more willing to tighten macro policy than many other emerging markets, to prioritize the quality of development over the quantity of economic growth.

The standout position has made this a good time to treat China as an investment destination separate from developed and emerging markets, and it supports BlackRock's positive view of Chinese equities and bonds on a strategic basis, the report said.

However, from a shorter perspective, a fine-tuning of policy stance is underway to help sustain economic momentum, as demonstrated by the People's Bank of China's move on Thursday to implement a cut of the reserve requirement ratio for banks to free more funds for loans, experts said. The RRR is the cash amount that financial institutions are required to deposit in the central bank.

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